Indian Self-Drive Car Rental Firm Beats Uber in Bitcoin Adoption

Uber might be dithering about accepting Bitcoin payments, but an Indian car sharing firm has taken the lead.

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Uber might be dithering about accepting Bitcoin payments, but an Indian car sharing firm has taken the lead. It claims to have raised $10 mln in funds, accepts cryptocurrencies and is planning an ICO.

Drivezy takes the leap

A self-drive rental firm in India, Drivezy, has raised $10 mln in a combination of debt and equity from American and Japanese investors, including Axan Partners that have invested $5 mln for an equity stake in the company.

The company has a fleet of over 1300 vehicles in four cities in India.

A consortium of Indian banks and financial companies have subscribed to $5 mln of debt. The company is also coming out with an ICO, to raise 17,625 ETH (~$5 mln).

The CEO and Co-founder of Drivezy, Ashwarya Pratap Singh, said:

"Considering the rising cost of important assets and resources such as housing and transportation, I believe the future is a shared one. With the growing popularity of Bitcoin in India, we feel that this is the right time to open ourselves up to alternative means in the sharing economy. This ICO is a part of our vision to leverage the power of Blockchain to build an open, secure and transparent technology to globalize the Indian car sharing marketplace."

The regulatory angle

An Indian firm planning an ICO raises several questions, primarily because cryptocurrencies operate in a grey area in India. Unlike regulators in the US, China or even Gibraltar, regulators in India have remained largely silent. So it comes as no surprise that the ICO of Drivezy will be launched in Japan and open to accredited investors only. That way, Drivezy can stay clear in case Indian regulators come out with sweeping regulations against crypto tokens in India.

The volatility question

One of the biggest problems with merchants accepting Bitcoin is the question of its volatile price. Drivezy has tied up with a payment processor, Unocoin, to manage this risk. While its customers might pay in Bitcoin, Drivezy receives the rupee value of those Bitcoins and is protected from volatility. This also means that if you have to get a refund, the amount of Bitcoins might be less/more than the Bitcoins you paid initially, depending on which way the price of Bitcoin has moved.

Why doesn't Uber accept Bitcoins?

Smaller firms like Drivezy have much more flexibility to take decisions like accepting cryptocurrencies for payment. For large companies like Uber operating in multiple jurisdictions, the decision is seen to be more difficult.

They have to ensure that they have a comprehensive policy about accepting cryptocurrencies and ensure that regulators are on board.

The incremental benefits of accepting Bitcoin are also smaller for companies like Uber, as their existing customer base is large, and cryptocurrency users are a niche community.

In spite of having a Bitcoin-friendly CEO, Uber has bigger problems to worry about, including loss of its London licence and a culture which supported gender discrimination and sexual harassment.